November 2, 2008
Trading Puts and Calls?
kristin asked:
Okay, so can you buy an option (either a put or call) and have no actual stock in that option, then wait till someone with stock needs to purchase your option in a hurry ro save their butt. Obviously, you would have to anticipate the stock in which you bought the option to either rise or fall to put stcok holders in a panic in order for them to pay you for your option. I had a classmate in finance that was making an average of $2000/day but had to slow down b/c it was too stressful and time consuming. But anyway, can you be the ‘middle man’ and just hold on to these options untill someone is willing to pay you fro them. Then that person would have to exercise that option with the Original writer (the person that I would have bought it from). Is this scenero realistic??
Okay, so can you buy an option (either a put or call) and have no actual stock in that option, then wait till someone with stock needs to purchase your option in a hurry ro save their butt. Obviously, you would have to anticipate the stock in which you bought the option to either rise or fall to put stcok holders in a panic in order for them to pay you for your option. I had a classmate in finance that was making an average of $2000/day but had to slow down b/c it was too stressful and time consuming. But anyway, can you be the ‘middle man’ and just hold on to these options untill someone is willing to pay you fro them. Then that person would have to exercise that option with the Original writer (the person that I would have bought it from). Is this scenero realistic??
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Comments on Trading Puts and Calls? »
I don’t think you quite understand options. Everyone is a middleman inoptions. If you buy an option, or give money, you can sell it anytime someone bids your required price. As you know an option is a derivative and isn’t the option market bigger than the shares in issue?
WOW!.
first look at your classmates monthly statements……………see if he is lyingI think he is…………….no one stops making 10000 a week……….and quits till they get a couple of million
aside from that.options are traded.you can buy and sell them whenever the mkt is open…………..It does not matter if the other person is covering a position or speculating….
Pick up a couple of books on puts and calls……….
probably free at the chgo merk and cbot…..
don’t believe anyone who tells tall tales of profits…be cynical
I am not sure your question make sense for the following reasons: options are traded and their value go up and down every day based on the underlying stock, you can buy an option but you can also write an option, options expire after a certain time and have a time value attached to them.
Trading option on the naked is a risky business. Options are great if you own the underlying stocks. Best and less risky strategey would be to short stocks instead of buying naked pull options.
Don’t foget your loss will be someone else gain.
Good luck.